Are you using credit to pay off old debt?

Are you stuck in the mountain of debt and using your credit cards to take care of it? If so, you could be in big financial trouble. Using credit cards to pay off old debt is a big no-no. The first thing you should know is that paying off debt by making more debt is one of the biggest financial mistakes you can make. Surely there is a better way to finance your debt?

An option would be to use a home equity loan to retire your old debt. The interest rates on home equity loans are almost always lower than those on credit cards and other types of loans. If you have successfully managed to build up equity in your home during the recent housing boom, you may be able to utilise this equity to get rid of old debt. Just keep in mind, however, that you are basically putting your house on the line. This means that if you are unable to make payments, your home could be at risk of foreclosure.

Another option would be a personal loan from your local bank. A personal loan carries less interest than other loans and credit cards. By using a personal loan you can eliminate debt, and you will then only have one monthly payment to focus on.

Paying off old debt can be an inconvenient, stressful and difficult thing to do. Be aware of the options you have at your disposal and make the best of them. This will make your life easier, especially your financial future.